As a small business owner, you’ll have a lot of challenges to overcome.
First, you need to come up with a fantastic idea that’s going to blow your audience away and attract plenty of investors to your company. Then, you need to figure out what kind of loan you’re going to apply for, and how you’re going to manage your repayments over time.
Before you can even start thinking about things like marketing costs, and business branding, you’ll also need to sit down and consider what your budget is going to look like when you launch your company. After all, your budget is what will guide you during the first stages of developing your start-up. It will show you how much you need to spend to drive your company towards success, and how much you can expect to earn in the months and years to come.
If your budget looks a little lean, then it might be time to seek out some cost-cutting methods. Fortunately, we have a few penny-pinching ideas that are sure to help.
1. Hire more freelancers
For years, the most common way to access additional expertise and support when you were running a company was to host interviews with local talent until you found someone that you wanted to add to your team. While you can still bring people onto your in-office staff if you want to, you’ll often be able to save a serious amount of cash by investing in freelancers instead.
Gig-economy workers or freelancers are people that you work with over the internet, often using email, and chat to correspond between projects. You can hire these people for short-term things, like building your website or making an advertising video for your company. Or, you can also work with some freelancers long-term too.
Not only are freelancers often more affordable than their in-office counterparts, as you pay them for the work they do, rather than paying by the hour, but these professionals can work from a distance too. That means you’re not spending cash on office overheads.
2. Look for ways to reduce your fixed costs
As a small business, there will be certain fixed costs that you need to pay to keep your company running every month. These costs may include things like the rent for your office, the expense of insurance, and the fees associated with electricity, broadband, and other utilities.
While it might seem as though you just have to accept those expenses as they come at first, the truth is that you can actually save a lot of cash just by doing some basic comparison shopping. Just as you’d look around for the best deal for your home broadband and television costs, you can also shop around for business expenses too. Check that you’ve got the most affordable provider for your:
- Accounting fees and book-keeping
- Business insurance and liability
- Office overheads and rent
- Broadband and telecommunications costs
- Professional services and support
While switching to a different office might be a headache if you decide that your rent is too high, it could save you a fortune in the long-term.
3. Make the most of tax deductions
When they’re trying to keep costs as low as possible, many small business owners assume that it’s a good idea to cut the costs they would pay for professional support from people like accountants and book-keepers. To some extent, this can be a good idea. For instance, you can keep bookkeeping costs low by investing in a software that will track your incoming and outgoing expenses for you.
However, when tax season does roll around, an accountant will often pay for themselves by helping you to save money in other crucial ways. For instance, by working with a professional accountant, you might be able to find opportunities to reduce your tax costs at the end of the year with certain deductions that you wouldn’t have found by yourself.
Additionally, some accountants can offer advice on how you can improve your cash flow and reduce expenses in certain areas the more time they spend looking at your accounts. When it comes to cutting corners and reducing expenses, you can’t really afford to get rid of your accountant.
4. Switch to the cloud for computing needs
If you’ve been exploring business and entrepreneurial opportunities for a while now, then you’ve probably heard about people starting cloud-based companies. This basically means that they’re running most of their operation on the cloud, rather than relying on physical hardware.
Cloud computing is an excellent way for small businesses and startups to save some cash. After all, you don’t need to pay for expensive servers on-site if you’re using cloud computing to manage your business data and operations. You can even cut the costs of cross-country telecommunications by switching to VoIP instead of using the Public Switched Telephone Network.
Life on the cloud also means that you’ll have an easier time hiring remote employees. When all your data and documents are located on the cloud, your team will be able to access them wherever they are, whenever they want.
5. Get rid of the office space
Finally, one of the easiest and most impactful way to cut costs as a business owner today is to get rid of your office space entirely. Although you might not be able to avoid having any form of physical real estate if you’re running a retail business or restaurant, you can run an office-based company without a physical location very easily.
Thanks to cloud computing and the internet, there’s no need to turn up to an office space for work every day. If you can get rid of this real-estate expense, then you’ll save a lot of money on things like electricity, office overheads, and even business furniture. Allow your employees to take the same route and work from home, and you can run a much leaner business, without having to pay extra rent every month.
This option won’t work for everyone, but it’s worth checking out if you do most of your business online anyway.
